What factors constitute a higher insurance premium? What choices can be made to decrease insurance premiums? The answers to these questions are something anyone who carries auto insurance should know. This article will outline the major influences on the price of an automobile insurance policy.
All about you
Of course, all an insurance agent has to judge you by are your habits and your past. These topics are bound to be discussed when obtaining an insurance policy:
Your driving history.
What insurance company would want to take on a high risk client for the same rate as a low risk client? If your driving record reflects a history of car accidents, speeding tickets, and other traffic violations, you will most likely be grouped in the high risk clientele, meaning you will pay more for your premium.
The make and model of your car will affect your insurance rates. Insurance companies take in account the chance that the car will be stolen, repair costs, and the safety rating of the vehicle. Presumably, sports cars are more likely to be broken into. These cars are built to go fast, so the drivers of these cars are also more likely to collect traffic violations.
Note: in the past, it was believed that the color of a car also influenced insurance rates; however, this is not presently true!
Locations with high crime rates and vandalism will increase your insurance premium. An increase in crime statistics increases the odds that you will make a claim, which in turn increases the amount you pay a month for car insurance. In addition, where you park your car in your community can affect your insurance rates. In a garage, your car is less likely to be broken into or damaged by inclement weather, which makes you less of a liability.
How often you drive.
Obviously, the more you drive, the more you are at risk. For a typical passenger vehicle, it is assumed that the number of miles driven per year is 12,000. However, most insurance companies base their policies off of a 10,000 mile mark. If you drive more than 10,000 miles a year, you will pay more. If you drive fewer than 10,000 miles a year, you could get a discount since you are in a lower risk bracket. Consequently, drivers who carpool often receive discounts for lowering their overall risk.
Most people have heard of the phrase “to be old and wise, you must once be young and stupid!” This is an insurer’s motto. Teenagers, the least experienced drivers of the bunch, are much more likely to be in an accident than their elders, meaning teens will have a higher insurance rate. Age 24 is when insurance rates begin to decline. Those between 40 and 50 years old have the least expensive insurance policies.
Note: sex and marital status also influence insurance premiums. Statistics indicate that collision rates are lower for females and generally higher for young males and single males.
The parameters of your policy have a great role in determining your overall insurance rate. A lower deductible will cost you more each month. If you have a lien holder, many times the bank with the lien will predetermine the terms of your policy, which could result in a higher insurance premium.
General tips for a lower premium
Some of these factors are out of your control, such as age, gender, and the area in which you live. However, factors such as driving record and the type of car you drive can be manipulated to result in a lower insurance premium. Be a cautious driver and avoid wrecks and traffic violations. If you are tempted to illegally park to make a five minute trip in and out of the grocery store, ask yourself “Is this grocery trip really worth that $100 handicap violation?” Keep in mind, a great way to avoid wrecks is to keep your distance from other cars. If you are not near other cars, then they cannot be near you, which greatly reduces the risk of an accident. When you are in congested areas, pay careful attention to what is ahead of you but also make sure to keep a careful watch of what is going on behind you and on both sides of you. Being observant rarely has negative consequences. Be a good driver and get insurance discounts!
Author Miles Walker is a freelance writer and blogger who usually looks at car insurance comparison deals over at CarinsuranceComparison.Org. His most recent review looked at the best New Jersey car insurance.